But events took an unexpected turn. Large numbers of well-to-do Poles from Szceczin, including many of Sawicki’s friends, are moving into Germany and buying properties on such a scale that sleepy Prussian villages are taking on a Polish air.

“Polish people are buying a lot of houses. Thousands of houses,” said Sawicki, in his metal-working factory near the border. “It is a positive surprise.”

Polish migrant workers have arrived in huge numbers all over western Europe over the past decade. But what is happening around Szczecin is different. What flows from east to west here is not cheap labor but capital and economic influence.

Szceczin, which until borders were redrawn at the end of World War Two was the German city of Stettin, has become the economic centre of gravity for a chunk of eastern Germany now struggling with decline.

The trend might hold clues about future trends in the continent, showing the potential for Europe’s poorer east, with its rapid growth and younger population, to catch up with “old Europe” with its ageing workers and less dynamic growth.

Last year, Poland’s economy slowed dramatically as it felt the effect of the euro zone slowdown, but it still grew by 2 percent. Germany’s economy flat-lined with 0.7 percent growth.

“We look to Szczecin. For us, it is a kind of hope,” said Frank Gotzmann, the local government chief in a German district near the border who is so keen to tap into Szczecin’s dynamism that his business cards are printed in German and Polish.

About 80 percent of property transactions in German areas adjacent to Szczecin (pronounced Sh-ch-echin) involve Polish buyers, according to real estate agent Radoslaw Popiela. German schools are providing classes in Polish to cater for their Polish pupils, mostly the children of professionals who commute to jobs in Szczecin.

Meanwhile, German families are making the trip across the border to Szczecin to visit the opera or philharmonic orchestra, or drink coffee at Starbucks – diversions not available at home where investment is sparse.

The half-hour drive from Szczecin, across the border into Germany, illustrates the differences between old and new Europe.

Heading south-west through the city’s suburbs, the road-sides are a messy riot of fuel stations, car dealerships and newly-built houses, all festooned with advertising billboards.

Cross the frontier into Germany and, instantly, the scenery changes. Szczecin’s suburban sprawl gives way to chocolate-box villages that do not seem to have changed for centuries.

In Rosow, the first settlement after the border, several stone cottages are falling down – the result, say locals, of young people moving away to the city.

But there are signs of new life: a rebuilt farmhouse in the centre of the village, a second renovated property a few doors away, a former restaurant being converted into apartments.

All are owned by Poles.

Real estate agent Popiela, who is Polish, bought a house in the village in 2007, fixed it up, and now lives there.

The attraction is simple economics. “To buy a 2-room flat in Szczecin you have to pay 80,000 to 90,000 euros. Here, for this price, you can have a house with a nice piece of land,” he said.

Popiela said that in Rosow, half the population was now Polish. At the kindergarten in the nearby village of Tantow, he said, more than a third of the children are Polish.

Ninety percent of the Polish settlers don’t work in Germany but commute instead to jobs in Szczecin, said Popiela.

One measure of the growth are the numbers showing up for mass in the area’s Catholic churches. Most Poles are Catholics, while this part of Germany is traditionally Protestant.

Cezary Korzec, a Polish Catholic priest who lives in Rosow, said that in the parish to which the village belongs, the number of practicing Catholics had gone from 1,200 to 1,800 in the past few years because of the influx of Poles.

“This is the fastest developing parish in Germany,” he said.

CENTRE OF GRAVITY

All around the German areas adjacent to Szczecin, the city’s influence is being felt in small but telling ways.

Szczecin schools make so many excursions to the zoo in Ueckermunde, a German town north-west of the city, that the signs in front of the enclosures are written in Polish. In one village, local people say, a German baker sells Polish bread.

“Szczecin is a city of 500,000 people, there is nothing comparable on the German side,” said Bogdan Twardochleb, a journalist with Kurier Szczecinski, the local newspaper. “It is a centre of gravity that pulls everything towards it.”

There is some German influence flowing largely from the economic powerhouse beyond the country’s eastern backwater. Germany is the second biggest foreign investor in Szczecin, after Cyprus.

Bartlomiej Sochanski, Germany’s honorary consul in Szczecin, said a few hundred older Germans owned holiday homes on the Baltic coast nearby but he did not know of any pre-war German residents who had returned to claim property.

Most of the flow is in the other direction.

For centuries, the German town of Gartz, like the others in the area, looked to the city then called Stettin as its regional hub. The 13th century stone gatehouse at the entrance to Gartz is called “Stettiner Tor” because it straddles the road to the city.

These ties were severed at the end of World War Two. The Red Army took control and drew a new border, leaving Gartz and Szczecin on opposite sides, and with little contact.

Reviving those links now offers a lifeline.

The shrinking population has forced both secondary schools in Gartz district to close down in the past 10 years.

The town has clusters of abandoned buildings. Where the streets dip down to the banks of the Oder river, the roof of one terraced cottage has caved in.

By attracting young Polish professionals, the district, which has a population of 7,000, hopes to arrest the decline.

In Gartz primary school, one third of pupils are Polish speakers. Without them, the authorities might be forced to close the schools down and fire the teachers.

“We see children again, and this is nice,” said Gotzmann.

Meanwhile, local Germans are starting to discover Szczecin.

Gotzmann described how the local fire chief, a fan of Starbucks who used to have to travel for hours to find a coffee house, discovered on a work trip to Szczecin that there was a branch in the city. Two days later, he took his family.

“Szczecin is okay, not the centre of the universe but the centre of the region,” said Gotzmann. “We try to work together with Szczecin … This is the only solution for us.”

(Additional reporting by Peter Andrews; Editing by Ralph Boulton)

Lawyers for Saudi-born Abu Zubaydah, who alleges he was held illegally by the CIA in Poland, on Tuesday submitted an application the court to hear their client’s case. They argued there was no hope of him receiving fair treatment inside Poland.

Poland is the only country known to be conducting a criminal investigation into so-called “black sites” – the secret facilities in foreign countries where CIA agents detained and interrogated people they believed were al Qaeda militants.

But the investigation has been running for five years and there is no sign that anyone is close to being put on trial. Human rights groups accuse Poland of deliberately drawing out the investigation to avoid prosecuting senior politicians and embarrassing its U.S. allies. It denies the allegation.

“Poland’s lack of promptness may have had an impact on its (the investigation’s) effectiveness in numerous ways,” Zubaydah’s lawyers wrote in their 87-page submission to the Strasbourg-based court.

It said the possible consequences included “the loss of fresh evidence such as forensic evidence from the rendition sites and ‘black sites’, allowing the possibility of cover-up or obstruction by the security services, and prejudicing the availability of domestic remedies through the loss of witness and physical evidence”.

It was not clear if, by security services, the lawyers were referring to the CIA, Poland’s own agencies, or both.

According to rights groups and the Council of Europe, al Qaeda suspects were flown in secret to a remote Polish airfield between 2002 and 2005 and then transported to an intelligence academy near a village called Stare Kiejkuty.

Here, on the edge of a lake and surrounded by forest, rights campaigners say, the detainees were subjected to interrogation techniques which amounted to torture.

Zubaydah is now held at Guantanamo Bay, the U.S. military prison in Cuba. He has been granted the status of victim in the Polish criminal investigation, giving his legal representatives the right to be briefed on certain aspects of the case.

NO PENS ALLOWED

Polish officials deny that the CIA operated jails on Polish soil. They say they are conducting a full and fair investigation, free of any political pressure, but that some details have to stay secret to avoid exposing intelligence agents to attacks by al Qaeda sympathizers.

Prosecutors say the delays have happened because the investigation is complex, and because the U.S. government has turned down requests for information.

The application to the court in Strasbourg said that a Polish lawyer for Zubaydah has been denied the access to the investigation files he needs to properly represent his client.

It said he had only been allowed to see a small part of the case files, which are kept in the prosecutor’s office in the southern Polish city of Krakow.

When he can view the files, it said, he is not allowed to make notes on his laptop or even use a pen. He is forbidden from sharing his knowledge of the files with anyone, and cannot make legal submissions based on what he has read in them.

Around the time he was captured in Pakistan, the U.S. government said Zubaydah had run a camp in Afghanistan that trained some of those who carried out the September 11, 2001 attacks on the United States. He has not been prosecuted.

If the European court accepts Zubaydah’s case, it is likely to be several years before it makes a ruling. If it were to rule in his favor, it could award him damages and find Poland in violation of European law, embarrassing the country’s rulers.

The court is already hearing the case of another man who alleges he was held in a CIA jail in Poland, Saudi national Abd al-Rahim al-Nashiri. Poland has not answered questions about his case which the court put to it eight months ago.

(Editing by Pravin Char)

After a successful dollar bond issue last month he does not need an international rescue so the European Union, which says he is backsliding on democracy, and the International Monetary Fund cannot impose conditions to stop him.

They are worried that the EU’s enlargement since 2004 has brought in countries that do not fully share the same democratic norms as Germany, France, Britain or other big powers and this could eventually undermine the bloc’s values.

Investors have stuck with Hungarian assets because of the high yield despite three years of “Orbanomics” that included taking control of the central bank, taxes on some foreign firms and forcing private banks to take a loss on loans.

But if they take fright and sell, Orban may have to rethink as he cannot afford to alienate voters by allowing the currency to fall too quickly ahead of elections in 2014.

“Since the government needs to preserve exchange rate stability, capital flight is a constraint on policy initiatives,” said Daniel Hewitt, economist at Barclays.

Orban this week took control of the central bank via his former economy minister, promised to set up a state-owned banking system and stepped up rhetoric characterizing Hungary as a country embattled by foreign influences.

The combative prime minister also said small firms should be allowed to convert euro- and Swiss franc-denominated debt into forint loans, a move that could force further losses on banks, many of which are foreign owned.

LOAN RISK

Analysts say the biggest policy risk now is that the government will try to win the election by writing off some of the foreign currency households and small businesses loans.

Doing that could win Orban votes, but could shift market sentiment if it involved switching the burden from borrowers to private banks, or using a big chunk of central bank reserves.

“The new wave of concern is the new central bank governor and the potential plan to use reserves to help out the private sector that has non-HUF (non-Hungarian forint) loans,” said Sam Finkelstein, head of emerging debt at Goldman Sachs Asset Management in London.

“If sentiment towards emerging markets deteriorates, the Hungarian government policies will make bondholders more uncomfortable.”

The government itself has not said specifically what further economic policy tools it plans to use. It says the period of drastic measures is over and it will focus instead on rebuilding its credibility with the business community.

Bankers and government officials say the idea of a mass conversion of foreign currency loans has not been discussed.

“No plan like this is on the government’s table, this is a hoax with no grounds in reality. Even raising the idea is harmful and dangerous for Hungary’s international interests,” the press chief of the Economy Ministry, Viktoria Csorba, wrote to Reuters in an email on February 20.

ELECTION DRIVE

Orban is driven by winning next year’s election and according to a source who knows him he will put aside economic orthodoxy if that is what it takes. He has already shown that he can be pressured by financial markets.

On January 6 2012 after the forint hit an all-time low versus the euro and Hungary’s borrowing costs soared, Orban said an International Monetary Fund deal was in the interest of the country and his government would make efforts to secure a deal. After the forint recovered, though, his government went back to its previous anti-IMF rhetoric.

This year, market reaction to Orban has been muted because Hungary’s high returns relative to other markets make it attractive. It has one of the highest foreign ownership in the bond markets of any emerging market at around 45 percent.

Despite predictions from the IMF and analysts that Orban was wrecking the economy, Hungary still sold $3.25 billion worth of dollar bonds last month, tapping international markets for the first time since 2011.

Some market insiders even say sentiment has improved in the last few months as it has become clear that Hungary is reining in its budget deficit and does not need an international loan. Investment lawyers in Budapest point to an upturn in corporate deals coming across their desks.

That echoes the argument of Orban’s government, which says it fixed an economic mess inherited from his Socialist predecessors and stopped Hungary following Greece into collapse.

But sentiment could quickly change. The forint dropped more than one percent on Tuesday after Orban said there were too many foreign-owned banks in Hungary, railed against foreign currency loans and called for lower interest rates.

The forint dropped to 9-month lows versus the euro at 307.50 on Wednesday, but regained some strength after the foreign minister said the currency was too weak.

Adding to the general sense of unease among investors, Hungary’s parliament, dominated by Orban’s supporters, has also reduced the powers of the constitutional court. It was one of the few institutions that has stood up to Orban, and the move was roundly criticized by Brussels.

“I am surprised how well Hungary has held up as the story has been deteriorating for a while. There still seems to be a buy and hold attitude,” said Claire Dissaux, investment strategist at Millenium Global Investments.

“Bond positioning is very heavy, as it is a high yielder, Hungary has a current account surplus and risk appetite is good, but there is a limit to that and that limit is the currency. As they cut rates the currency will react and if anyone has not hedged, that is a risk.”

CONSTRAINTS

Orban’s success in financing Hungary’s needs from the market has certainly blunted the ability of the EU and IMF to rein in the policies it believes are risky.

The EU still has some levers. Hungary’s economy needs European aid. If its deficit goes above the 3 percent of gross domestic product set out under EU rules, it could forfeit this money. That constrains Orban from adopting an “election budget” packed with inducements for voters.

Orban will look instead to the central bank, now run by his close associate Gyorgy Matolcsy.

Experts close to the government say one option being discussed in ruling party circles is for the central bank to persuade private banks to soften terms for foreign exchange loans. The banks would foot the bill.

The more radical option would be to dip into central bank reserves, currently at 35 billion euros, to convert foreign exchange loans into forint.

This carries high risks because a healthy level of reserves is important for market confidence and if combined with a general shift in the flow of money away from emerging markets could trigger a big sell-off in the forint.

Orban has little sympathy for foreign investors, but a falling forint would make imported goods and foreign currency loans more expensive for voters.

“Anti-capitalist, anti-foreign ownership rhetoric is popular for the electorate,” said Daniel Bebesy, analyst at Budapest Fund Management.

“For the ordinary people EUR/HUF exchange rate is going to remain a key barometer for the success of economic policy, so an extremely weak level could trigger discontent within the public.”

(Additional reporting by Sujata Rao in London; editing by Anna Willard)

After a successful dollar bond issue last month he does not
need an international rescue so the European Union, which says
he is backsliding on democracy, and the International Monetary
Fund cannot impose conditions to stop him.

They are worried that the EU’s enlargement since 2004 has
brought in countries that do not fully share the same democratic
norms as Germany, France, Britain or other big powers and this
could eventually undermine the bloc’s values.

Investors have stuck with Hungarian assets because of the
high yield despite three years of “Orbanomics” that included
taking control of the central bank, taxes on some foreign firms
and forcing private banks to take a loss on loans.

But if they take fright and sell, Orban may have to rethink
as he cannot afford to alienate voters by allowing the currency
to fall too quickly ahead of elections in 2014.

“Since the government needs to preserve exchange rate
stability, capital flight is a constraint on policy
initiatives,” said Daniel Hewitt, economist at Barclays.

Orban this week took control of the central bank via his
former economy minister, promised to set up a state-owned
banking system and stepped up rhetoric characterising Hungary as
a country embattled by foreign influences.

The combative prime minister also said small firms should be
allowed to convert euro- and Swiss franc-denominated debt into
forint loans, a move that could force further losses on banks,
many of which are foreign owned.

LOAN RISK

Analysts say the biggest policy risk now is that the
government will try to win the election by writing off some of
the foreign currency households and small businesses loans.

Doing that could win Orban votes, but could shift market
sentiment if it involved switching the burden from borrowers to
private banks, or using a big chunk of central bank reserves.

“The new wave of concern is the new central bank governor
and the potential plan to use reserves to help out the private
sector that has non-HUF (non-Hungarian forint) loans,” said Sam
Finkelstein, head of emerging debt at Goldman Sachs Asset
Management in London.

“If sentiment towards emerging markets deteriorates, the
Hungarian government policies will make bondholders more
uncomfortable.”

The government itself has not said specifically what further
economic policy tools it plans to use. It says the period of
drastic measures is over and it will focus instead on rebuilding
its credibility with the business community.

Bankers and government officials say the idea of a mass
conversion of foreign currency loans has not been discussed.

“No plan like this is on the government’s table, this is a
hoax with no grounds in reality. Even raising the idea is
harmful and dangerous for Hungary’s international interests,”
the press chief of the Economy Ministry, Viktoria Csorba, wrote
to Reuters in an email on Feb. 20.

ELECTION DRIVE

Orban is driven by winning next year’s election and
according to a source who knows him he will put aside economic
orthodoxy if that is what it takes. He has already shown that he
can be pressured by financial markets.

On January 6 2012 after the forint hit an all-time low
versus the euro and Hungary’s borrowing costs soared, Orban said
an International Monetary Fund deal was in the interest of the
country and his government would make efforts to secure a deal.
After the forint recovered, though, his government went back to
its previous anti-IMF rhetoric.

This year, market reaction to Orban has been muted because
Hungary’s high returns relative to other markets make it
attractive. It has one of the highest foreign ownership in the
bond markets of any emerging market at around 45 percent.

Despite predictions from the IMF and analysts that Orban was
wrecking the economy, Hungary still sold $3.25 billon worth of
dollar bonds last month, tapping international markets for the
first time since 2011.

Some market insiders even say sentiment has improved in the
last few months as it has become clear that Hungary is reining
in its budget deficit and does not need an international loan.
Investment lawyers in Budapest point to an upturn in corporate
deals coming across their desks.

That echoes the argument of Orban’s government, which says
it fixed an economic mess inherited from his Socialist
predecessors and stopped Hungary following Greece into collapse.

But sentiment could quickly change. The forint dropped more
than one percent on Tuesday after Orban said there were too many
foreign-owned banks in Hungary, railed against foreign currency
loans and called for lower interest rates.

The forint dropped to 9-month lows versus the euro at 307.50
on Wednesday, but regained some strength after the foreign
minister said the currency was too weak.

Adding to the general sense of unease among investors,
Hungary’s parliament, dominated by Orban’s supporters, has also
reduced the powers of the constitutional court. It was one of
the few institutions that has stood up to Orban, and the move
was roundly criticised by Brussels.

“I am surprised how well Hungary has held up as the story
has been deteriorating for a while. There still seems to be a
buy and hold attitude,” said Claire Dissaux, investment
strategist at Millenium Global Investments.

“Bond positioning is very heavy, as it is a high yielder,
Hungary has a current account surplus and risk appetite is good,
but there is a limit to that and that limit is the currency. As
they cut rates the currency will react and if anyone has not
hedged, that is a risk.”

CONSTRAINTS

Orban’s success in financing Hungary’s needs from the market
has certainly blunted the ability of the EU and IMF to rein in
the policies it believes are risky.

The EU still has some levers. Hungary’s economy needs
European aid. If its deficit goes above the 3 percent of gross
domestic product set out under EU rules, it could forfeit this
money. That constrains Orban from adopting an “election budget”
packed with inducements for voters.

Orban will look instead to the central bank, now run by his
close associate Gyorgy Matolcsy.

Experts close to the government say one option being
discussed in ruling party circles is for the central bank to
persuade private banks to soften terms for foreign exchange
loans. The banks would foot the bill.

The more radical option would be to dip into central bank
reserves, currently at 35 billion euros, to convert foreign
exchange loans into forint.

This carries high risks because a healthy level of reserves
is important for market confidence and if combined with a
general shift in the flow of money away from emerging markets
could trigger a big sell-off in the forint.

Orban has little sympathy for foreign investors, but a
falling forint would make imported goods and foreign currency
loans more expensive for voters.

“Anti-capitalist, anti-foreign ownership rhetoric is popular
for the electorate,” said Daniel Bebesy, analyst at Budapest
Fund Management.

“For the ordinary people EUR/HUF exchange rate is going to
remain a key barometer for the success of economic policy, so an
extremely weak level could trigger discontent within the
public.”

(Additional reporting by Sujata Rao in London; editing by Anna
Willard)

The absence of answers will add to pressure on Poland from human rights groups, who say it must prove it is committed to revealing the truth about what part it may have played in helping the CIA detain and interrogate al Qaeda suspects during Washington’s “War on Terror” following the September 11, 2001, attacks on the United States.

As part of a case brought to the ECHR by a Saudi man who alleges he was held in a CIA-run jail in a Polish forest, the court in July last year asked the Polish government to answer a list of questions about the alleged jail.

“To date, no such document has been submitted to the court,” the court said in a statement to Reuters. “The government have only filed written submissions which reiterate information already made public.”

The Polish government says it wants to co-operate fully with the Strasbourg court. But it argues that a criminal investigation underway inside Poland into the same allegations prevents it from answering the ECHR’s questions.

That investigation is now in its fifth year with no sign of a conclusion. Rights activists accuse the Polish authorities of stalling the investigation because a trial could be politically embarrassing, though officials deny this.

Julia Hall of human rights group Amnesty International said if Poland was giving priority to its own investigation, not the European court’s case, it had to show it was serious.

“We want to see the investigation in Poland concluded and for there to be the full truth about CIA operations in Poland.”

WATER-BOARDING

Reports by bodies including the Council of Europe and the European Parliament state that between 2002 and 2005, CIA-chartered aircraft brought al Qaeda suspects to a remote Polish airfield. The detainees were driven to a Polish intelligence academy near the village of Stare Kiejkuty.

Once there, the reports say, CIA agents held the detainees with no court hearings or access to lawyers, and subjected them to interrogation techniques, including water-boarding, which rights activists say amounted to torture.

Polish officials deny publicly there was ever a CIA jail but they say they want a full and impartial investigation. Under Polish law and international treaties, assisting or failing to stop torture is a crime.

In a letter sent to the Strasbourg court on September 5, the government said it was “not in a position to address in detail the questions submitted by the court or present the requested documents,” because prosecutors in Poland were working on their own investigation.

“By addressing in detail the questions submitted by the court…the government could be seen as interfering with the competencies of the prosecution and judiciary authorities, which are independent of the government in Poland,” the letter said.

Until now, the contents of the letter were unknown because the court had agreed to keep it confidential. The court has now made the letter public, though it said confidentiality could be offered if Poland submitted more information.

Polish officials reacted angrily to the decision to make the letter public, saying communications from the government to the court contained sensitive information.

“The decision of the court…is a threat to the security of Poles,” Justice Minister Jaroslaw Gowin told state radio. “We must reconsider further cooperation with the court.”

But Adam Bodnar, of the Warsaw-based Helsinki Foundation for Human Rights, said that argument did not stand up.

“What they submitted was already in the public domain, there was nothing new,” Bodnar said.

The prosecutor’s office in the southern city of Krakow, which is handling the Polish criminal investigation, said it had asked the Prosecutor-General for permission to extend the mission when it expires on February 11.

(Additional reporting by Chris Borowski and Marcin Goettig in Warsaw and Wojciech Zurawski in Krakow, Poland; Editing by Angus MacSwan)

The nomination of Anna Grodzka, a 58-year-old who completed a sex change three years ago, will test attitudes in Poland, a devoutly Catholic country where traditional moral values often clash with new, liberal ideas about sexuality.

The opposition Law and Justice party said it opposed Grodzka because she lacked the experience need for the job. But one of the party’s lawmakers had previously said Grodzka had a “boxer’s face,” and questioned if she could really be considered a woman.

Speaking to reporters in parliament after Janusz Palikot, the leader of her ultra-liberal party, the Palikot Movement, announced he was putting her name forward for the role, Grodzka said she was ready to take on the challenge.

“I’ve been a member of parliament for over a year now and this experience is enough, I think,” Grodzka said. “It’s important what one represents. If there are voices against me, they are voices that are heading into the past.”

A businesswoman with a psychology degree, Grodzka was elected in October 2011, becoming Poland’s first transsexual lawmaker. The deputy speakership is a more visible role: it involves chairing sessions of parliament when the speaker is not available, and carrying out occasional ceremonial duties.

As one of the bigger factions in the Sejm, or lower house of parliament, Palikot has the right to assign its nominee to take up one of the chamber’s deputy speakerships. There is a vacancy because the previous Palikot appointee stepped down.

POLITICAL EXPERIENCE

Law and Justice said it would push for a rule change which would, in effect, stop Grodzka taking up the post.

“This person has very little political experience to be carrying out such a role,” Joachim Brudzinski, a senior Law and Justice lawmaker, told Reuters.

“In the next few days we will announce a proposal to limit the number of deputy speakers, not every parliamentary group should have its own deputy speaker.”

In video footage posted on the YouTube video-sharing site, Krystyna Pawlowicz, another Law and Justice member of parliament, talked about Grodzka’s sex change.

Addressing a gathering of readers of a right-wing newspaper, Pawlowicz recounted how, when she had been on a radio show with Grodzka, she got mixed up about whether to address her as a man or a woman.

“Really, a boxer’s face. How can I not make a mistake?” Pawlowicz says in the footage.

“I said: ‘Ms. Grodzka, it’s not like when you stuff yourself full of hormones you become a woman. The genetic code decides this. Let’s do a blood test. Nothing will change that, no operation’.”

Palikot, leader of Grodzka’s party, said his deputies had voted overwhelmingly for her nomination and were only concerned that it would make her a target for further insults.

Poland’s parliament regularly grapples with issues such as abortion, gay partnerships and in-vitro fertilisation – all of which drive a wedge between liberals and conservatives, who are backed by the still-influential Catholic church.

There were angry debates in the chamber last week over draft legislation that would have given legal status to same-sex partnerships.

Prime Minister Donald Tusk backed the initiative, but several of his own supporters crossed the aisle and joined the conservative opposition to vote it down.

(Additional reporting by Chris Borowski and Adrian Krajewski; Editing by Sophie Hares)

The decision by lawyers for Saudi-born Abu Zubaydah to go to the court in Strasbourg raises fresh questions about how serious Poland is about investigating allegations that the CIA, as part of a global operation to detain suspected al Qaeda militants a decade ago, used facilities on Polish territory.

Poland is the only country in the world known to have opened a criminal investigation into the alleged CIA jails, but it is now in its fifth year and there is no sign that anyone is close to being put on trial.

“Polish authorities … have failed to conduct a thorough, effective and timely criminal investigation,” said a letter that lawyers for Abu Zubaydah, now held in the U.S. military jail at Guantanamo Bay, said they had faxed to the ECHR on Monday.

“In 2008, a criminal investigation was opened, but it was limited in scope, shrouded in secrecy, and it has made little or no progress in practice,” said the letter. “It has become apparent to the applicant that there is no meaningful prospect of a remedy being available to him in Poland.”

The letter notified the ECHR that Abu Zubaydah’s lawyers would be filing a formal application for a hearing. They want the court to rule on whether Polish officials violated his human rights by helping U.S. intelligence agents to detain him.

The ECHR has already taken up the case of another Saudi man who says he was held in a CIA-run jail in Poland – Abd al-Rahim al-Nashiri.

SLOW INVESTIGATION

If the Polish criminal investigation founders, human rights campaigners say it will greatly reduce the chances that the full picture about the methods used by the CIA in the U.S. “war on terror” will ever emerge.

Polish officials deny that the CIA operated jails on Polish soil. They say they want a full and fair investigation, and that there is no political pressure on the prosecutors.

The prosecutors say they are doing their best to investigate the allegations, but that it is a slow process, not helped by the fact that U.S. authorities have not responded to requests for information.

However, lawyers for Abu Zubaydah and al-Nashiri say they suspect the investigation is being deliberately stalled because a trial would be politically embarrassing for the Polish state, and its allies in the United States.

According to documents filed by their lawyers, Abu Zubaydah, al-Nashiri and several other people believed by the CIA to be militants were flown in secret to a remote Polish airport.

They were then allegedly held, without a hearing before a judge or access to a lawyer, at a Polish intelligence academy at Stare Kiejkuty, a thickly forested area about 180 km (110 miles) north of the Polish capital. Their lawyers and rights activists say they were subjected to treatment that amounted to torture.

If Polish officials knew about the CIA operation, or provided support to it, that could be deemed a crime under Polish law and international human rights conventions.

U.S. officials have acknowledged that the CIA held al Qaeda suspects outside the United States, but have never publicly disclosed where or in what circumstances.

The U.S. government says Abu Zubaydah ran a camp in Afghanistan that trained some of those who carried out the September 11, 2001 attacks on U.S. cities. It accuses al-Nashiri of directing an attack on the U.S. warship Cole in the Yemeni port of Aden in 2000 that killed 17 sailors.

(Editing by Kevin Liffey)

Polish prosecutors are investigating the country’s role in a global operation run by U.S. secret services a decade ago to transport suspected al Qaeda members to facilities outside the United States where they could be held and interrogated without the safeguards set out under U.S. law.

Poland is one of only two countries known to have opened a criminal investigation into the secret jails, and its case could set a precedent for prosecutions in other countries. If it languishes, it greatly reduces the chances that the global veil over “black sites” will be lifted.

What little information has emerged suggests the case could implicate some of Poland’s most senior politicians in illegal detentions and upset the United States, a key ally.

Lawyers, human rights activists and other sources familiar with the case say that what started out as a robust investigation appears to have ground to a halt since the original investigators were taken off the case early last year.

“The image is of a complete lack of action,” said Mikolaj Pietrzak, lawyer for Saudi national Abd al-Rahim al-Nashiri, who says he was detained in a CIA jail on Polish soil.

“The case is obviously, in my opinion, under political control … The most convenient thing politically is for the case to drag on,” said Pietrzak.

Polish officials say the prosecutors are independent, while the prosecutors say they are doing all they can to collect evidence, arguing that their work had been slowed in part because U.S. officials had not responded to requests for information.

A spokesman for the U.S. embassy in Warsaw declined comment on the case because, he said, it concerned intelligence issues.

Former U.S. President George W. Bush said in 2006 that the CIA operated detention facilities outside U.S. territory, but Washington has not detailed where they were or how they worked.

The Polish investigation, already in its fifth year, is due to end next month and prosecutors say they may apply to extend it. If they do not, the case would have to be brought to trial or closed, both politically risky options for Poland.

The problem, said Jozef Pinior, a Polish senator who has lobbied for a full investigation into what the CIA was doing in Poland, is that security officials from the time of the alleged CIA operations exert influence through an “old boys’ network”.

“They (the government) are in a sandwich between opening this issue up and the pressure from the hard core of the Polish state, the secret service, the prosecutor’s office, who say: ‘Let’s keep this secret’,” said Pinior.

The only other country to open a criminal investigation into allegations of CIA jails on its soil was ex-Soviet Lithuania, but that case is no longer open.

Poland’s government, a centrist coalition with close ties to Washington, was not in office when the alleged CIA “black site” was in operation. It has said it wants a full investigation.

Prime Minister Donald Tusk’s office, in response to Reuters questions about the case, said that prosecutors’ independence was established by law. “No executive body can influence the prosecutor’s actions,” it said in a statement.

“VACATION SPOT”

According to documents filed by lawyers for the two men who say they were held by the CIA in Poland, detainees were flown to the tiny Szymany airport and then driven to a lakeside Polish intelligence academy in the village of Stare Kiejkuty, about 180 km (110 miles) north of Warsaw, where the CIA had a facility.

Polish officials have never publicly acknowledged the existence of CIA prisons in Poland.

One of the few Polish officials to ever comment on the CIA programme was Marek Dukaczewski, who was head of military intelligence when the alleged jail was in operation. Dukaczewski told a Polish television interviewer in 2010 that Poland did cooperate with the United States in the fight against violent militants.

But when asked about Stare Kiejkuty, he suggested only that U.S. agents returning from tours in Afghanistan might have used the site as a sort of combined vacation spot and training venue.

“This is a facility located in a beautiful location. Perhaps officers who landed there, after completing their assignments in other parts of the world, stopped to share their knowledge or their observations that are important for our services,” Dukaczewski told Poland’s TVN24 broadcaster.

Leaks by whistle-blowers to journalists and campaigners, the testimony of alleged detainees, and years of research by rights activists all point to Poland having played a role in the CIA’s “extraordinary rendition” programme. The investigation is designed to assess the extent of that role.

There is evidence the CIA also set up secret jails in Romania, Lithuania and Thailand, and possibly elsewhere, according to reports by the Council of Europe and the United Nations. Human Rights groups and others say the CIA used the facilities to interrogate people using techniques that, they say, amount to illegal torture.

In Poland’s case, detainees brought to the complex at Stare Kiejkuty were held without access to defence counsel, and with no rulings from judges to authorise their detention, the documents filed by their lawyers say.

An application to the European Court of Human Rights submitted by lawyers for al-Nashiri said he was often hooded, stripped naked or shackled during seven months at Stare Kiejkuty – techniques approved by the CIA interrogators’ superiors.

He was also subjected to some non-authorised methods, the application states. In one instance, it said, an interrogator held a handgun close to al-Nashiri’s head and simulated loading a bullet. Around the same time, an interrogator revved a power drill while al-Nashiri stood hooded and naked, according to the application. Lawyers for Abu Zubaydah, another man who says he was detained at the Polish site, point to similar treatment.

U.S. officials say both men are dangerous.

They say Abu Zubaydah ran a camp in Afghanistan which trained some of those who carried out the September 11, 2001 attacks on U.S. cities and accuse al-Nashiri of directing the attack on the U.S. warship Cole in the Yemeni port of Aden in 2000 that killed 17 sailors.

There has been no suggestion that Polish citizens were directly involved in the detentions at Stare Kiejkuty.

But lawyers and rights campaigners say that if jails existed, senior Polish officials must have known about them and therefore have a case to answer.

The International Convention against Torture establishes an obligation on states to prevent torture on their soil, arrest anyone carrying it out, carry out a “prompt and impartial investigation,” and give victims proper redress.

“The abuses that occurred, occurred with authorisation at the highest political level and with some assistance provided by the intelligence services in Poland and other countries,” said Nils Muiznieks, Human Rights Commissioner with the Council of Europe, a rights watchdog of which Poland is a member.

Under pressure from the Council of Europe and other human rights bodies, Poland opened a criminal investigation in the summer of 2008. Initially prosecutors in the capital Warsaw handled the case but early last year the prosecutor-general ordered that it be shifted to the southern city of Krakow.

Since then, the investigation had gone quiet, said Bartlomiej Jankowski, a lawyer for the second alleged ex-detainee, Abu Zubaydah.

“I am not receiving any information (from prosecutors) about new documents, nor am I informed about any new hearings. This is something that worries me,” said Jankowski. He said he believed the Krakow prosecutors were committed to seeing justice done, but that they could not help but be affected by the political context.

An individual with close knowledge of the case, who spoke to Reuters on condition of anonymity, said the investigation had been nearing trial, with evidence from Polish intelligence services, when it was moved to Krakow without explanation.

The source said it was now important to see signs that the prosecutors in Krakow were actively bringing the case towards a trial. “I don’t know why nothing is happening,” said the source. “If nothing is happening, alarm bells should ring.”

Muiznieks said Poland had done more to investigate than other European countries that hosted “black sites” and that the United States should take some of the blame for not being more forthcoming in helping the investigation.

But he told Reuters: “Five years is a long time and we would really like to see the Polish authorities bring this investigation to a conclusion and to make its findings public.”

The office of Leszek Miller, who was prime minister at the time the alleged prisons were running, said he did not wish to comment. Aleksander Kwasniewski, president at the time, did not respond to a request for comment, and nor did Zbigniew Siemiatkowski, former head of domestic intelligence.

Asked by Reuters about the decision to transfer the case to Krakow, a spokesman for the prosecutor-general’s office in Warsaw said only it was “for the good of the investigation”.

Piotr Kozmaty, spokesman for the Appellate Prosecutor’s office in Krakow, said his colleagues were working hard on the case but that it took time. “Undoubtedly, the subject of the investigation has a large political context, but the Polish prosecutor’s office is independent and despite the difficulties with issues such as cooperation with the American side, it will do its utmost to collect a complete body of evidence.” (Editing by Simon Robinson and Philippa Fletcher)

Polish prosecutors are investigating the country’s role in a global operation run by U.S. secret services a decade ago to transport suspected al Qaeda members to facilities outside the United States where they could be held and interrogated without the safeguards set out under U.S. law.

Poland is one of only two countries known to have opened a criminal investigation into the secret jails, and its case could set a precedent for prosecutions in other countries. If it languishes, it greatly reduces the chances that the global veil over “black sites” will be lifted.

What little information has emerged suggests the case could implicate some of Poland’s most senior politicians in illegal detentions and upset the United States, a key ally.

Lawyers, human rights activists and other sources familiar with the case say that what started out as a robust investigation appears to have ground to a halt since the original investigators were taken off the case early last year.

“The image is of a complete lack of action,” said Mikolaj Pietrzak, lawyer for Saudi national Abd al-Rahim al-Nashiri, who says he was detained in a CIA jail on Polish soil.

“The case is obviously, in my opinion, under political control … The most convenient thing politically is for the case to drag on,” said Pietrzak.

Polish officials say the prosecutors are independent, while the prosecutors say they are doing all they can to collect evidence, arguing that their work had been slowed in part because U.S. officials had not responded to requests for information.

A spokesman for the U.S. embassy in Warsaw declined comment on the case because, he said, it concerned intelligence issues.

Former U.S. President George W. Bush said in 2006 that the CIA operated detention facilities outside U.S. territory, but Washington has not detailed where they were or how they worked.

The Polish investigation, already in its fifth year, is due to end next month and prosecutors say they may apply to extend it. If they do not, the case would have to be brought to trial or closed, both politically risky options for Poland.

The problem, said Jozef Pinior, a Polish senator who has lobbied for a full investigation into what the CIA was doing in Poland, is that security officials from the time of the alleged CIA operations exert influence through an “old boys’ network”.

“They (the government) are in a sandwich between opening this issue up and the pressure from the hard core of the Polish state, the secret service, the prosecutor’s office, who say: ‘Let’s keep this secret’,” said Pinior.

The only other country to open a criminal investigation into allegations of CIA jails on its soil was ex-Soviet Lithuania, but that case is no longer open.

Poland’s government, a centrist coalition with close ties to Washington, was not in office when the alleged CIA “black site” was in operation. It has said it wants a full investigation.

Prime Minister Donald Tusk’s office, in response to Reuters questions about the case, said that prosecutors’ independence was established by law. “No executive body can influence the prosecutor’s actions,” it said in a statement.

“VACATION SPOT”

According to documents filed by lawyers for the two men who say they were held by the CIA in Poland, detainees were flown to the tiny Szymany airport and then driven to a lakeside Polish intelligence academy in the village of Stare Kiejkuty, about 180 km (110 miles) north of Warsaw, where the CIA had a facility.

Polish officials have never publicly acknowledged the existence of CIA prisons in Poland.

One of the few Polish officials to ever comment on the CIA program was Marek Dukaczewski, who was head of military intelligence when the alleged jail was in operation. Dukaczewski told a Polish television interviewer in 2010 that Poland did cooperate with the United States in the fight against violent militants.

But when asked about Stare Kiejkuty, he suggested only that U.S. agents returning from tours in Afghanistan might have used the site as a sort of combined vacation spot and training venue.

“This is a facility located in a beautiful location. Perhaps officers who landed there, after completing their assignments in other parts of the world, stopped to share their knowledge or their observations that are important for our services,” Dukaczewski told Poland’s TVN24 broadcaster.

Leaks by whistle-blowers to journalists and campaigners, the testimony of alleged detainees, and years of research by rights activists all point to Poland having played a role in the CIA’s “extraordinary rendition” program. The investigation is designed to assess the extent of that role.

There is evidence the CIA also set up secret jails in Romania, Lithuania and Thailand, and possibly elsewhere, according to reports by the Council of Europe and the United Nations. Human Rights groups and others say the CIA used the facilities to interrogate people using techniques that, they say, amount to illegal torture.

In Poland’s case, detainees brought to the complex at Stare Kiejkuty were held without access to defense counsel, and with no rulings from judges to authorize their detention, the documents filed by their lawyers say.

An application to the European Court of Human Rights submitted by lawyers for al-Nashiri said he was often hooded, stripped naked or shackled during seven months at Stare Kiejkuty – techniques approved by the CIA interrogators’ superiors.

He was also subjected to some non-authorized methods, the application states. In one instance, it said, an interrogator held a handgun close to al-Nashiri’s head and simulated loading a bullet. Around the same time, an interrogator revved a power drill while al-Nashiri stood hooded and naked, according to the application. Lawyers for Abu Zubaydah, another man who says he was detained at the Polish site, point to similar treatment.

U.S. officials say both men are dangerous.

They say Abu Zubaydah ran a camp in Afghanistan which trained some of those who carried out the September 11, 2001 attacks on U.S. cities and accuse al-Nashiri of directing the attack on the U.S. warship Cole in the Yemeni port of Aden in 2000 that killed 17 sailors.

There has been no suggestion that Polish citizens were directly involved in the detentions at Stare Kiejkuty.

But lawyers and rights campaigners say that if jails existed, senior Polish officials must have known about them and therefore have a case to answer.

The International Convention against Torture establishes an obligation on states to prevent torture on their soil, arrest anyone carrying it out, carry out a “prompt and impartial investigation,” and give victims proper redress.

“The abuses that occurred, occurred with authorization at the highest political level and with some assistance provided by the intelligence services in Poland and other countries,” said Nils Muiznieks, Human Rights Commissioner with the Council of Europe, a rights watchdog of which Poland is a member.

Under pressure from the Council of Europe and other human rights bodies, Poland opened a criminal investigation in the summer of 2008. Initially prosecutors in the capital Warsaw handled the case but early last year the prosecutor-general ordered that it be shifted to the southern city of Krakow.

Since then, the investigation had gone quiet, said Bartlomiej Jankowski, a lawyer for the second alleged ex-detainee, Abu Zubaydah.

“I am not receiving any information (from prosecutors) about new documents, nor am I informed about any new hearings. This is something that worries me,” said Jankowski. He said he believed the Krakow prosecutors were committed to seeing justice done, but that they could not help but be affected by the political context.

An individual with close knowledge of the case, who spoke to Reuters on condition of anonymity, said the investigation had been nearing trial, with evidence from Polish intelligence services, when it was moved to Krakow without explanation.

The source said it was now important to see signs that the prosecutors in Krakow were actively bringing the case towards a trial. “I don’t know why nothing is happening,” said the source. “If nothing is happening, alarm bells should ring.”

Muiznieks said Poland had done more to investigate than other European countries that hosted “black sites” and that the United States should take some of the blame for not being more forthcoming in helping the investigation.

But he told Reuters: “Five years is a long time and we would really like to see the Polish authorities bring this investigation to a conclusion and to make its findings public.”

The office of Leszek Miller, who was prime minister at the time the alleged prisons were running, said he did not wish to comment. Aleksander Kwasniewski, president at the time, did not respond to a request for comment, and nor did Zbigniew Siemiatkowski, former head of domestic intelligence.

Asked by Reuters about the decision to transfer the case to Krakow, a spokesman for the prosecutor-general’s office in Warsaw said only it was “for the good of the investigation”.

Piotr Kozmaty, spokesman for the Appellate Prosecutor’s office in Krakow, said his colleagues were working hard on the case but that it took time. “Undoubtedly, the subject of the investigation has a large political context, but the Polish prosecutor’s office is independent and despite the difficulties with issues such as cooperation with the American side, it will do its utmost to collect a complete body of evidence.”

(Editing by Simon Robinson and Philippa Fletcher)

Should the investigation find Poland’s state institutions have been at fault, it will deal a severe blow to the reputation of a country which routinely is held up in Brussels as a model of the successful use of European Union (EU) development cash.

EU officials are looking into how Poland’s state highways agency managed a multi-year program, worth a predicted 5.5 billion euros ($7.27 billion) this year alone, to modernize the creaking road system Poland was left with after decades of Communist rule.

The scheme – one of the biggest publicly-funded infra-structure projects in Europe – has more than doubled the size of Poland’s high-speed road network in four years. But it also has left dozens of contractors alleging that the highways agency, GDDKiA, owes them billions of euros in unpaid bills.

The agency says it has complied with the law and where disputes arose it was mainly because contractors’ work was not up the required quality.

The risk for Poland is that if the commission backs the contractors’ complaints, it could jeopardize Poland’s ability to access funds from the EU’s next round of development funds, cash on which its economy depends for growth.

“This issue of management of road-construction contracts by GDDKiA has been brought to our attention at the Commission. Our services – in charge of regional policy – have asked the Polish authorities to provide more information,” said Shirin Wheeler, commission spokeswoman on regional policy.

“We have also asked the Polish audit authority (within the Finance Ministry) to carry out an audit of the specific contracts which are affected. We expect the results in the first few months of next year,” she said.

Poland is the biggest recipient of EU funds. It secured 68 billion euros ($90 billion) in the bloc’s 2007-2013 budget, and is seeking a similar amount from the next budget.

GDDKiA’s chief executive, Lech Witecki, in an interview with Reuters, said he expected the European investigation would confirm his contention that it was the contractors who were primarily to blame for the problems.

“We are not afraid of its results, as a matter of fact we are happy that it is going on, as it will show the real state of affairs and that we’ve been acting according to the law,” Witecki said.

COURT CASES

The current phase of Poland’s road-building project is a tale of hope and ambition in one of Europe’s most dynamic and fastest-growing countries that degenerated into bitter recriminations.

Poland’s PZPB construction industry lobby estimates that contractors are contesting in court non-payments by GDDKiA of 6 billion zlotys ($1.94 billion). The actual value of the cash subject to dispute could be twice that amount, according to people in the sector.

On several sections of highway linking Poland’s biggest cities, work has ground to a halt because the contractor walked off the job over disputes with the highways agency, or because the agency terminated the contracts.

The problems have sent ripples throughout Europe’s construction sector. Big multinational companies, from Austria’s Strabag to Irish firms SIAC, SISK and Roadbridge have said that delays in payments on Polish contracts have affected their financial performance.

Worse for the Polish economy, some of its own big building firms have been pushed into difficulty because of losses made on the road contracts. Many smaller firms have gone bust. The local construction sector generates around 6 percent of gross domestic product, and employs almost 800,000 people.

“From the outside, it looks like the construction industry in the country which is the largest building site in Europe decided to commit suicide,” Marek Michalowski, head of the PZPB lobby group, told Reuters.

DISPUTES

Poland launched its latest phase of road-building with an ambitious aim: to turn its patchwork of bumpy two-lane cross country roads into a proper highway network that would tie it into Europe after years of isolation behind the Iron Curtain.

It is now possible to drive the 570 km (350 miles) from Warsaw to Berlin along fast, four-lane highways.

However, the project hit trouble almost as soon as the contractors arrived at the construction sites with their machinery. Contractors and GDDKiA have contradictory accounts of what went wrong.

Contractors say the highways agency was responsible for preparing the projects, but did not do its job properly. Irish contractor SRB said it had to stop work on one section of road because a building permit was withdrawn.

Firms said when routine problems arose – for example, the discovery of archaeological sites on the route, or raw materials that were unavailable or unexpectedly costly – GDDKiA was not flexible about finding a solution.

In a rare step for the construction industry in Europe, the agency cashed in a number of bonds, worth millions of euros each, that contractors had lodged as a guarantee they would complete their contracts.

Several companies terminated the jobs, saying they could not work under those conditions. A number of firms that managed to finish the work found they could not get paid even though, they said, they had done everything they were required to do.

The overall picture, contractors say, is of an agency where staff were struggling to keep up with the huge scale of the project and were tied up in red tape.

“The attitude (inside GDDKiA) appears to be: ‘I don’t want to make a decision, let contractors go to court over it’,” said Finn Lyden, chief executive of Irish builder SIAC, one of the firms taking the agency to court.

The highways agency says that where disputes have arisen, it is because contractors’ work did not meet its exacting quality standards. It said it was forced itself to terminate several contracts because of failures by contractors.

It also says firms were caught out because they did not properly plan for the possibility that the prices of raw materials would rise.

Nevertheless, GDDKiA chief Witecki acknowledged there was room for improvement in the way the agency managed contracts.

He said some tenders had been rushed through in order to make sure they met a deadline to qualify for EU funding, and that in future that they would be spread out over time to make them more manageable.

He also said future contracts would allow for greater flexibility if contractors’ costs go up, though getting the right price for tax-payers “will remain key.”

Bilfinger Berger Budownictwo SA, a local unit of Germany’s Bilfinger, is another of the firms in legal disputes with GDDKiA over payments. Its chief executive, Piotr Kledzik, said the agency had to change the way it manages contracts.

“It can’t go on like this any more. Contractors and the government have to get involved in dialogue,” Kledzik said. “Let’s hope it happens before the sector is reduced to rubble.”

($1 = 3.0927 Polish zlotys) ($1 = 0.7568 euros)

(Additional reporting by Maciej Onoszko; Editing by Michael Roddy)